Catalyst posted a net loss of $35.2 million for the quarter, in contrast
to net earnings of $655.7 million in the third quarter, when the
one-time gains realized on emergence from creditor protection were
booked. Before specific items, net losses were $15.7 million and $7.5
million in Q4 and Q3 respectively. Adjusted EBITDA was $7.2 million in
Q4, with no impact from restructuring costs, and $13.8 million in Q3
($14.0 million before restructuring costs).

Market conditions were mixed during the fourth quarter, with North
American paper demand down from the third quarter for directory and
newsprint, and up for coated and uncoated grades. Benchmark prices were
up for newsprint and coated and otherwise stable for paper, while there
was moderate benchmark price recovery for pulp. A market curtailment at
Powell River was necessary over the holidays to balance production with
orders, and Catalyst incurred a loss from discontinued operations
largely due to an increased estimated pension withdrawal liability
associated with the Snowflake closure.

"We saw lower prices for coated and newsprint and weaker demand across
our paper product lines in 2012. However, capacity reductions helped
mitigate the demand impacts," said Catalyst President and CEO Kevin J.
Clarke. "Pulp prices took a hit as markets weakened in China due to
overstocked inventories. These sorts of challenges aren't going away,
but with a better cost structure across all product segments, and
continued market share momentum, we're better positioned to take them
on."

Results for the Year

Net earnings of $583.2 million for 2012 were heavily impacted by
one-time non-cash restructuring credits and fair value accounting
adjustments. This compared with a $974.0 million net loss in 2011 which
was driven largely by asset impairment charges.

Catalyst entered creditor protection on January 31, 2012, and exited on
September 13, having achieved a US$390.4 million or 60 per cent
reduction in its debt, savings in annual interest expense of US$33.9
million, and a range of other cost reductions. The restructuring
included the permanent closure of its Snowflake mill at the end of the
third quarter. Results from this discontinued operation are excluded
from those being reported, with comparative periods having been
restated accordingly.

Before specific items - which also included restructuring-related fees,
closure costs at Snowflake, and a foreign exchange gain on translation
of US dollar-denominated debt - Catalyst posted a net loss of $37.8
million ($2.62 per common share), in contrast to a net loss of $126.3
million in 2011 ($0.33 per common share). Total sales were $1,058.2
million, slightly below $1,079.7 million in 2011.

Adjusted earnings before interest, taxes, depreciation and amortization
(EBITDA) were $55.4 million for 2012 ($60.7 million before specific
items), down from $62.8 million for 2011 ($68.7 million before specific
items). A significant drop in pulp transaction prices and lower average
paper transaction prices were only partially offset by cost reductions,
higher sales volumes and favourable currency impacts.

Liquidity

Total liquidity stood at $97.9 million at the end of 2012, compared to
$96.7 million a year earlier. The borrowing base on the new Asset
Backed Loan (ABL) facility put in place upon the conclusion of the
restructuring was down mainly due to lower accounts receivable and
inventories as a result of the Snowflake shutdown. Letters of credit,
amounts drawn and cash on hand were also down. Free cash flow was
negative $47.2 million largely due to reorganization costs of $37.5
million and salaried defined benefit pension solvency funding of $11.8
million, in comparison with negative $58.8 million in 2011.

Internally generated cash flows from operations, in combination with
advances under the ABL facility, are expected to be sufficient to meet
future operating cash requirements.

Restructuring

Catalyst issued 14,400,000 new common shares to holders of its
now-cancelled 2016 Notes upon its exit from creditor protection in
September. A further 127,571 common shares were issued in December to
unsecured creditors who elected this option in lieu of participating in
the proceeds pool from specified asset sales. On January 7, 2013,
Catalyst's new common shares were listed on the Toronto Stock Exchange
under the symbol "CYT".

In addition to savings associated with the cancellation of its previous
notes, additional annual cost reductions include new competitive
five-year labour agreements ($18-$20 million), lower municipal taxes
($6.1 million), and pension funding relief ($7 million). The closure of
the Snowflake recycled paper mill will also eliminate financial losses
due to intense input-cost and market-related pressures, and
significantly reduce working capital requirements.

The US court-approved sale of the assets of the Snowflake mill and the
shares of the Apache Railway closed on January 30, 2013, for US$13.5
million and other non-monetary consideration. Closure costs were $18.6
million. Agreements were also reached in 2012 to sell smaller non-core
assets in both Port Alberni and Powell River, and efforts continue to
market the site of the former Elk Falls operation and Catalyst's
remaining poplar plantation lands.

On February 13, 2013, Catalyst agreed to sell its interest in Powell
River Energy for $33 million. Catalyst will continue to purchase
electricity under the existing power purchase agreement which expires
in 2016, with possible extension to 2021 in one-year terms at
Catalyst's option.

Under the terms of the Plan of Arrangement, unsecured creditors who did
not elect to receive shares in settlement of their claims will receive
their pro rata share of the net sale proceeds. Given that many
creditors elected to receive shares, this will result in a distribution
of approximately 40% of the net proceeds of the sale. Catalyst will
offer to purchase a portion of the notes issued as part of its exit
financing arrangements with the balance of the sale proceeds. The sale
is expected to close in the first quarter of 2013.

Pension Portability Option

Catalyst offered members of the defined benefit pension plan for
salaried employees a one-time reduced lump-sum payment option as full
settlement of their entitlements under the plan. Members were required
to make their elections by December 15, 2012 and have until June 30,
2013 to revoke such elections in favour of continuing to receive
monthly pension payments.

Selected Highlights

(In millions of dollars, except where otherwise stated)

Three monthsendedDecember2012

Nine monthsendedSeptember2012

Year ended
December,
2011

Sales 2

$

260.5

$

797.7

$

1,079.7

Operating earnings (loss) 2

(5.7)

24.8

(704.5)

Depreciation and amortization 2

12.9

23.4

105.5

Adjusted EBITDA 1 2

7.2

48.2

62.8

- before restructuring costs 1 2

7.2

53.5

68.7

Net earnings (loss) attributable to the company

(35.2)

618.4

(974.0)

- before specific items 1

(15.7)

(22.1)

(126.3)

Total assets

978.8

1,040.1

737.6

Total long-term liabilities

720.6

768.3

713.6

Adjusted EBITDA margin 1 2

2.8%

6.0%

5.8%

- before restructuring costs 1 2

2.8%

6.7%

6.4%

Net earnings (loss) per share attributable to the
company's common shareholders (in dollars)

Numbers exclude the Snowflake mill's results from operations which have
been reclassified as discontinued operations; losses from discontinued
operations, net of tax, are shown separately from continuing operations
in the consolidated statements of earnings (loss) in our annual
consolidated financial statements for the year ended December 31, 2012.

Outlook

Global economies were buffeted by various factors in 2012 including the
sovereign debt crisis in Europe, fiscal health issues in North America
and slowing growth in China. The U.S. economy is expected to improve in
2013 with emerging economies in Asia and Latin America being a bright
spot for most sectors. The volatility of the Canadian dollar continues
to have significant impact on our business and its recent move to
sub-par levels is welcome.

Nonetheless, capacity restarts are adding considerable uncertainty to
demand forecasts with weaker prices expected across most mechanical
printing papers. The market for our products continues to be fiercely
competitive as capacity restarts and a seasonally slower first half
puts more pressure on pricing in both coated and uncoated specialty
mechanical papers. Sales and volume renewals are expected to be hard
won as are gains in market share. Pulp prices are recovering at a
slower pace than anticipated, however improved demand for tissue along
with a stronger economy in China is expected to keep pulp markets
stronger in 2013.

Planned maintenance - with total mill outages at two facilities - will
put pressure on operating results in the first half of 2013. Input cost
pressures are expected to be marginal with the exception of BC Hydro
rate increases, compounded by the return to provincial sales tax (PST),
adding approximately $8 million annually to electricity costs. Capital
spending is expected to be in the range of $25 million for the year.

Completion of outstanding restructuring requirements is progressing,
including sale of the permanently closed Elk Falls facility and
finalization, by June, of the pension portability election process.
Proceeds from the sale of Powell River Energy, which is expected to
complete within the first quarter, will be applied to unsecured
creditor claims and partial payment of exit notes.

Further Quarterly Results Materials

This release, along with the full annual Management Discussion
&Analysis, Financial Statements and accompanying notes are available on
our web site at www.catalystpaper.com/Investors. This material is also filed with SEDAR in Canada and EDGAR in the
United States.

Catalyst Paper manufactures diverse specialty mechanical printing
papers, newsprint and pulp. Its customers include retailers, publishers
and commercial printers in North America, Latin America, the Pacific
Rim and Europe. With three mills, located in British Columbia, Catalyst
has a combined annual production capacity of 1.5 million tonnes. The
company is headquartered in Richmond, British Columbia, Canada and is
ranked by Corporate Knights magazine as one of the 50 Best Corporate
Citizens in Canada.

Forward-Looking Statement

Certain matters in this news release, including statements with respect
to general economic and market conditions, demand for products, pricing
expectations, anticipated cost savings and capital expenditures, are
forward looking. These forward-looking statements reflect management's
current views and are based on certain assumptions including
assumptions as to future economic conditions, demand for products,
levels of advertising, product pricing, ability to achieve operating
and labour cost reductions, currency fluctuations, production
flexibility and related courses of action, as well as other factors
management believes are appropriate. Such forward looking statements
are subject to risks and uncertainties that may cause actual results to
differ materially from those contained in these statements, including
those risks and uncertainties identified under the heading "Risks and
Uncertainties" in Catalyst's management's discussion and analysis
contained in Catalyst's annual report for the year ended December 31,
2012 available on the company's website at www.catalystpaper.com/investors and at www.sedar.com.